Plot For South Windsor Film Studio Still Unfolding, Slowly

SOUTH WINDSOR — For five years now, the ambitious but long-delayed Connecticut Studios project has charmed this suburban community with promises of a $56 million dollar development featuring eight sound stages, a hotel and restaurants.

Three years after a gala groundbreaking attended by the governor and other top elected leaders, there are few signs of a major development, let alone any busy movie studio or hundreds of new jobs.

Mayor Tom Delnicki said the years of deadlines, delays and extensions are simply part of the process for keeping a big and complicated project on track. "That's the kind of pressure needed to get something done,'' he said.

The town council voted for the sixth time last month to extend the deadline for a contractual clause that says the 20 acres the town donated to the project would revert back to the town if construction hadn't begun by October 2012. The latest deadline is Sept. 30.

"With a project of this magnitude, our concern is, what happens if it fails?" town manager Matt Galligan said. "That's how we look at all the projects in this town — what are the what ifs?"

Galligan said there are about 10 items the council must complete before construction can finally begin. They include amending the development plan, negotiating a development agreement for the construction of public improvements, writing bonds and then reaching out to lenders.

Residents, meanwhile, continue to drive by the planned construction site at the corner of Route 5 and Chapel Road where the studio complex would be built.

"I want it to be a real groundbreaking, not just the show they put on a few years ago, which I refused to attend," said town council member Kevin McCann.

Lobbying Pays Off

To build a movie studio near Hartford, the developers are spending $5 million out of their own pocket, bolstered by $14 million in lucrative film state tax credits, a $14 million loan from First Niagara Bank, and a $5 million loan from the state Department of Economic and Community Development

For the town of South Windsor, the financial twists and turns have left town officials cautious about the risk of bankruptcy, and watchful of the $1.5 million mortgage developers have placed on the 20 acres the town gave them. Under the proposal, the town's contribution of $12 million in public infrastructure improvements for the studio will be repaid by the taxes generated from another project proposed by the developers for the property — a $30 million electric power generator.

"All our claims for financing and having the resources to build the project have been vetted not just by us, but by the state of Connecticut,'' said Craig Stevenson, a spokesman for Connecticut Studios. "They offered us the loan because of the project's viability.''

Connecticut Studios LLC is a joint venture of two entities, Providence-based real estate development company Halden Acquisition Group and California-based Pacifica Ventures.

Pacifica Ventures owns Albuquerque Studios in Albuquerque, N.M., which opened in 2007 and has produced Disney's "The Lone Ranger" and four seasons of the AMC drama "Breaking Bad." In 2011, Pacifica opened Sun Center Studios outside Philadelphia, where they recently filmed Sony Picture Studios' "After Earth."

For the past six years, Connecticut has eagerly sought studios like Pacifica Ventures with the state's film tax credit program. But after criticism that the program was overly generous, the General Assembly this year halted the credits for all productions except companies that open for business after July 1. That exception applies uniquely to Connecticut Studios.

The developers would have lost the tax credits entirely had it not been for a last-minute rescue by the General Assembly.

"We did obviously want to make sure our project was protected, and it was,'' said former House Speaker Thomas Ritter, who was hired by Connecticut Studios to lobby for the exception to the tax credit moratorium.

Lobbying records show that between Jan. 12, 2009, and Jan. 13, 2013, Halden Acquisition Group paid nearly $194,000 in fees to Brown Rudnick LLP, a law firm that employs Ritter.

A Project With No Guarantees

Last October, in a letter to Mayor Delnicki and the town council, Connecticut Studios CFO Ralph Palumbo and principal developer Anthony DelVicario acknowledged frustration about the project, saying they had been trying to make the development a less "speculative" deal for the town.

"Basically, the core business, the studio and hotel are pretty speculative," they wrote. "Despite having marketing studies completed by industry professionals that show they can be successful, there are no guarantees."

Because the studio has yet to be built, there are no commitments from moviemakers or television shows.